LONDON: Copper prices fell on Thursday as some investors took advantage of a price rise in the previous five sessions to book profits.
Benchmark copper on the London Metal Exchange (LME) was down 0.2% at $8,867 a tonne by 1113 GMT.
“Copper has its ups and downs as some people are taking profits. But fundamentals still look strong on copper,” said Dan Smith, head of research at Amalgamated Metal Trading, adding that signs of rising demand from China and weaker dollar support the metal.
Copper demand in the world’s top consumer China has been improving in the wake of seasonal demand pick-up, along with post-pandemic economic recovery.
The dollar headed for its longest losing streak in 2-1/2 years on Thursday after the Federal Reserve sounded close to calling time on interest rate hikes. A weaker dollar makes the greenback-priced commodity more attractive for non-dollar holders.
Copper rises for fifth day as markets brace for Fed rate decision
European equities fell, and oil prices dipped, having hit their lowest since late 2021 earlier this week.
Worries about copper supplies on the LME market have resurfaced as cancelled warrants – metal earmarked for delivery – are at 45% of the total at 73,475 tonnes compared with 29% a week ago.
This helped to create a premium or backwardation for the cash over the three-month copper contracts, suggesting a tightening supply and demand balance.
The backwardation in copper is quite small but still meaningful as it is the first one since November, excluding a very brief episode in January, Smith said.
LME aluminium was up 0.8% at $2,305 a tonne, zinc was flat at $2,866.5, nickel fell by 0.1% to $22,450, lead added 0.5% to $2,127 and tin rose by 1.9% to $23,830.
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